If you're on a fixed-rate UK mortgage, your lender almost certainly lets you overpay up to 10% of your balance each year without penalty. Go a pound over and you'll trigger an Early Repayment Charge. Here's how the rule really works, including the bits most articles get wrong.
Almost every fixed-rate UK mortgage (and many tracker products) gives you an annual allowance to overpay by up to 10% of your outstanding mortgage balance, without any Early Repayment Charge. This is the core of the deal, you get a fixed rate for certainty, but in exchange you're only allowed a limited amount of flexibility. The 10% allowance is how the flexibility is rationed.
Exact figures vary, a few lenders allow 20%, a handful allow only 5%, and some offshoots (especially short-term trackers) allow unlimited overpayments. But 10% is the market standard. You'll find the specific rules for every major UK lender on our Nationwide overpayment page, Halifax page and so on.
This is where articles get it wrong. The allowance does not reset on 6 April (the start of the UK tax year). It resets on either:
You'll find your reset date in your mortgage offer document or on your annual statement. If you can't find it, call your lender, they'll confirm it over the phone in under a minute.
If you're planning a big overpayment near your anniversary, confirm the exact reset date in writing. Lenders have no obligation to warn you before an ERC triggers.
Lenders calculate the 10% figure based on your balance at the start of the allowance year. Some use the balance on the anniversary date; others use the balance at the start of the calendar year; a few recalculate each month against a rolling balance. The differences are usually small, but they matter at the margin.
You take out a £250,000 mortgage on 1 June 2024. On 1 June 2025, your balance has reduced to £242,000 through normal monthly payments. Your 10% allowance for the next year is £24,200 (10% of the anniversary balance), not £25,000 (10% of the original loan). It's a small but real difference.
You don't get warned and you don't get blocked. The lender simply processes the overpayment and then applies an Early Repayment Charge to the excess amount. That ERC is typically 1–5% of the excess, depending on how far into your fix period you are.
£200,000 mortgage, 10% allowance = £20,000 tax-free overpayment per year. You overpay £25,000. The £5,000 excess triggers the ERC. If your ERC rate is 3%, that's £150 in penalties. Our full guide to ERCs covers how these are calculated and when they taper off as your fix ends.
Not every UK lender uses the standard 10% rule. Notable variations:
If you're planning to overpay seriously, a few tactics extract maximum value:
Trackers and standard variable rates often have no overpayment restriction at all. If you've rolled off your fix onto the SVR while shopping for a new deal, you may have a window of unlimited overpayments. MoneyHelper's guide to mortgage types explains the difference.
Offset mortgages work completely differently, you're not technically overpaying, just reducing the balance the lender charges interest on. The 10% rule usually doesn't apply in the same way. See our offset mortgage calculator and offset guide for the full mechanics.
The 10% is per mortgage, not per person. If you and a partner are on one mortgage and want to overpay separately, you're still sharing the same single allowance. Coordinate, don't double-up.
Your old lender's allowance ends the day the new mortgage completes. Your new lender's allowance starts on the same day and is based on their rules and your new balance. This is why switching mid-year can sometimes unlock a second 10% allowance within 12 months, a useful but rarely-mentioned tactic.
The 10% rule is an allowance, not a target. If you can afford to overpay at its cap, you'll clear your mortgage 7–10 years earlier on a standard 25-year term. If you need to exceed it, split across years or wait for the end-of-fix window. Either way, know your lender's exact reset date before you do anything major, and use our main overpayment calculator to model the numbers before committing.
Our main overpayment calculator is the only UK tool that properly tracks the 10% allowance and flags ERC penalties as you type. No sign-up required.